Quick Hits: Consumer Confidence Rattled
Brief scrutiny of today's headlines.
Confidence in the economy edged up in September, the Conference Board reports.
However, the private New York-based research group cautions that confidence remains near a 16-year low and that the latest reading doesn't reflect Monday's 777-point stock market plunge.
"September's increase in the Consumer Confidence Index was due solely to an improvement in the short-term outlook," Lynn Franco, director of The Conference Board Consumer Research Center, said in a prepared statement. "Shocks, such as the 1987 crash, generally tend to have a temporary adverse effect on confidence, lasting an average two to four months unless they result in significant job losses. Just as noteworthy, consumers' assessment of current conditions continues to indicate that the current economic environment remains quite weak."
Consumers saying current business conditions are "bad" increased to 34.2% from 32.7% and those claiming business conditions are "good" fell to 12.5% from 13.7% last month. Those saying jobs are "hard to get" rose to 32.8% from 31.7% in August while those saying jobs are "plentiful" fell to 12.2% from 13.5%.
Consumers' short-term outlook improved, but remains downbeat. Those anticipating business conditions to weaken in the next 6 months declined to 21.3% from 25.2% and those expecting conditions to improve rose to 13.5% from 12%. Consumer spending represents about 70% of the nation's gross domestic product. The US Department of Commerce reports that personal spending increased less than 1% in August and was flat when adjusted for inflation.
The Conference Board says the outlook for employment also improved a little. Consumers expecting fewer jobs in the months ahead declined to 26.8% from 30%. Those anticipating more jobs increased to 11.8% from 10.7%.
The proportion of consumers expecting their income to rise in the coming months decreased slightly to 14.2% from 15.4%.
The Consumer Confidence Survey is based on a representative sample of 5,000 US households. The cutoff date for September's preliminary results was September 23rd.
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